Corporate social responsability and corporate governance

Corporate social responsibility (CSR) is a model of corporate governance (CG) extending fiduciary duties from fulfillment of responsibilities toward the firm's owners to fulfillment of analogous fiduciary duties toward all the firm's stakeholders. After considering the place of CSR in the debate about alternative CG modes, a full‐fledged social contract foundation of the multistakeholder and multifiduciary model is presented. The chapter shows that CSR is a social norm that would endogenously emerge from the stakeholders' social contract seen as the first move in an equilibrium selection process that reaches the equilibrium state of a CG institution. The social contract provides a model of the impartial mediating reasoning performed by a board of directors striving to balance different claims of stakeholders. It also allows deducing the multistakeholder objective function that socially responsible firms maximize, and then provides a specification of the particular fiduciary duties owed to each stakeholder according to its position.